Medicaid Webinar on May 26th

Attorney Keenan will participate in a nationally-broadcast webinar presented by Strafford Publications on May 26, 2022 from 1 to 2:30 pm EST titled “Medicaid Planning When a Spouse Enters a Nursing Home: Avoiding Costly Pitfalls to Preserve Spousal Income”.

Attorney Keenan will be co-presenting with Attorney Shelley Golde Dowell of Louisville, Kentucky.

The intended audience is attorneys, accountants, financial advisors, paralegals and other professionals.

Attorney Keenan’s portion of the presentation will cover the following topics:

• How can the Community Spouse Resource Allowance (CSRA) be optimized for the married client’s benefit?

• Avoid spending down exempt resources.

• Identifying exempt transfers.

• When is divorce a viable option in a spend-down strategy?

• Updating the estate plan.

Please click here for registration information.

Everyone in Connecticut Has a Will

Well, sort of. To put it another way, the Connecticut legislature has a “default” last will and testament ready and waiting for you in case you happen to pass away without one. That’s arguably a good thing since 54% of U.S. adults don’t have a will. This default approach to distributing your estate is known as the “intestacy laws”.

The problem is that the default will that the State drafted for you is a little odd.

If you pass away without a will and you’re survived by a spouse and you have no kids or surviving parents, then your entire estate goes to your spouse, which is fine. That makes perfect sense. But then the intestacy laws get a little strange for the following two (very common) scenarios:

If you are survived by a spouse and parents, but no children: The first $100,000 of your estate goes to your spouse plus 75% of whatever is left. The remaining 25% goes to your parents.

If you are survived by a spouse and children of your current marriage: The first $100,000 and 50% of the rest of your estate goes to your spouse. The remaining 50% goes equally among your children.

Theoretically, anyway, these laws are supposed to reflect how your average Nutmegger would want his estate to be distributed if he never got around to signing a will. However, over the past 25 years I’ve drafted a lot of wills for clients who fit into one of the two above categories and not once has a married client with children told me that he would like the first $100,000 and half of his estate to go to his spouse and the rest to the kids. As you can imagine, in the vast majority of cases where there are no extraordinary circumstances, everything simply goes to the surviving spouse, and nothing goes to the kids. The children don’t typically get anything until both spouses pass away. Nor have I ever had a married client without kids sign a will saying 25% of the estate goes to her parents, particularly if they are elderly and may need a nursing home placement in the foreseeable future.

Let me throw in one more tidbit to further complicate things: These intestacy laws will only apply to some of your assets. They do not apply to any accounts with beneficiary designations since those funds automatically go straight to the designated beneficiaries upon your death. Nor do they apply to any jointly owned assets, since your name is simply removed from those assets when you die. So, in the end, without a comprehensive plan in place, upon death your assets will essentially go flying off in all different directions.

So, if you’re in the majority and you don’t have a last will and testament yet, then make sure to thank the State of Connecticut for writing one for you. Just don’t expect it to have any resemblance to your actual wishes.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship. If you need legal advice, consult with a lawyer instead of a blog.

Do You Know Where Your Will Is?

Ah…did you have to hesitate for a second or two after reading that question? If you’re one of the 46% of U.S. adults who even have a will, then there’s a very good chance you’re not quite sure where it is. That’s because (thankfully!) there’s been no need to use it since you signed it many years ago. However, if no one knows where it is and no one can find it after you pass away, then it’s like you never signed a will in the first place.

Most people assume that a safe deposit in a bank is the best place to keep the will, but I always advise against that. The problem is that if you don’t have a second name on the box and you pass away, then the process of accessing the box becomes very complicated. Your Executor actually needs a probate court order to get into the box and a bank rep needs to be there to make sure that only the will is removed.

Also keep in mind that, unless the family dynamics are a bit unusual, no one is going to steal your will. It has no value on the open market! So, usually the best place to keep the will is at home with your other important papers so that it’s easy for the family to find.

The last tip is to make sure your Executor is crystal-clear on the location of your will, and if it’s locked up then make sure she knows the combination or where the key is. Under Connecticut law, the Executor has 30 days to file the will with the local probate court. The Executor will have plenty to do already, so please don’t add “scramble around madly looking for the will to beat the 30-day deadline” to her task list!

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship. If you need legal advice, consult with a lawyer instead of a blog.

Connecticut Probate Court Fees Explained

There is always a Connecticut probate court fee when you pass away. It does not matter how much your estate is worth (unless you end up with little-to-no assets, which is rare) nor does it matter how many of your assets go through a probate administration process.

Unfortunately, you need to lay common sense aside for a second in order to understand this. Common sense would dictate that if none of your assets go through probate (everything was in a living trust, or jointly owned, or beneficiary-driven, etc.) then there shouldn’t be a probate court fee since the probate court didn’t have to do anything. Well…

The problem is that Connecticut has its own estate tax (of course) that is assessed when you pass away. However, the exemption is extraordinarily high at $9.1 million this year, meaning that you need to have an estate beyond this figure before the Connecticut estate tax kicks in. It’s very rare that I run across clients with estates anywhere close to this level. Nonetheless, an estate tax return needs to be filed with the probate court so that the judge can review it and confirm that no estate tax is due. The problem is that all of the decedent’s assets (both probate and non-probate assets) need to be reported on the return, then the probate court’s fee is based on the overall size of the estate, regardless of how many of the assets ended up going through a probate administration process.

I think the most helpful way to understand this is to look at the probate court fee as more of a tax and not a genuine “fee” since the probate court’s bill is based on the size of your estate and nothing else. A “fee” implies that you’re charged based on all of the work that the clerks and judge had to do, but that’s not actually what the probate court fee is based on.

The good news is that, in the grand scheme of things, the probate court fee is not awful. They use a sliding-scale calculation to determine the fee (click here for an online calculator). For example, a $500,000 estate ends up triggering a $1,865 probate court fee. So, it’s not an earth-shattering cost relative to the size of the estate, but most of my probate clients are surprised there is any fee at all when their loved one went to great lengths in order to keep his/her assets out of probate upon death.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship. If you need legal advice, consult with a lawyer instead of a blog.

Do You REALLY Need a Living Trust?

Revocable living trusts are all the rage in estate planning these days. When I meet with new clients who have done some online homework and discussed estate planning with family and friends beforehand, they seem to believe that living trusts are what all the cool kids have in their estate plans. There are certainly some “cool” aspects to living trusts, but that doesn’t necessarily mean that they are the right estate planning tools for everyone.

Here are the important benefits of using a living trust, instead of a last will & testament in your estate plan:

• Living trusts are a tool for sparing assets from being dragged through a lengthy probate process upon your death.

• Living trusts are private documents, contrasted with last wills & testaments which become public documents upon your death.

• If you are suddenly out of commission due to injury or illness, there is a mechanism in your trust document that allows someone to immediately take over the management of your trust assets for you until you are back in the saddle.

• If you own real estate outside of Connecticut, then the benefit of probate avoidance doubles since you can avoid probate administration in two states, not just Connecticut.

And now for some of the downsides and “myths” about living trusts that you should be aware of:

• At least in Connecticut, you will not save a penny in probate court fees. I know that doesn’t make any sense but it’s true. Even if you avoid having any assets go through probate, someone still needs to file an estate tax return with the probate court on your behalf. The return must report the value of all your assets (probate and non-probate assets) and the court will charge a fee based on the total size of your estate.

• Since a trust document is much more comprehensive than a last will and testament, the legal bill for preparing the trust will be significantly higher than the fee for doing a will. Perhaps twice the legal fee.

• There’s more legwork involved in using a living trust as the centerpiece of your estate plan. After you sign the trust, you then need to identify assets that would otherwise get dragged through probate and re-title them into the name of the trust (accounts, real estate, etc.). Otherwise, you will not achieve the probate avoidance you were aiming for. This is not the case with a last will and testament which requires no re-titling of assets.

• In order for the living trust approach to work well, you need to continuously ensure that you have no probate assets. In other words, if you acquire new real estate or open new accounts after establishing your living trust you need to make sure the new assets are titled in the name of the trust. If you fail to do this, your family may end up having to deal with probate upon your death despite your best efforts.

I know some practitioners push these living trusts pretty hard, but honestly, it’s not necessarily the right estate planning tool for everyone. It’s worth sitting down with an experienced estate planning attorney to go over your particular situation and decide whether it’s worth the extra cost and all the re-titling of assets that you would need to do.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship. If you need legal advice, consult with a lawyer instead of a blog.

The Life of a Connecticut Executor

Most people are honored to find out that they have been appointed as the Executor for someone’s will. However, there seems to be a near-universal underestimation of what that role entails. Below is a list of tasks that need to be on every Executor’s radar screen as they work their way through the probate administration process. The list is by no means exhaustive. The purpose of this post is not to provide a collegiate-level seminar on how to manage an estate. The goal is to help you appreciate what the job entails before you appoint an Executor in your Last Will & Testament. As you will see, this is not a role in which everyone will thrive, and you should avoid appointing the wrong person.

• Collect Assets. Figure out if the decedent had bank accounts, investment accounts, retirement funds, life insurance, real estate, automobiles, valuable personal effects, etc. Then take control of those assets.

• Real Estate. Lock up and secure the property, make sure the heat is on to avoid frozen pipes and continue to pay insurance premiums until it’s turned over to the beneficiaries.

• Cars. Keep them locked and don’t let anyone drive them while they are in the estate. If someone drives them around and gets into an accident, then the estate may be in trouble.

• Personal Stuff. There’s a chance that the decedent’s tangible personal property (a.k.a. “stuff”) could be an important issue to address. In most cases, the family doesn’t care about any of the stuff and a majority of it gets donated or thrown out, or the family peaceably distributed everything without the need for the Executor’s involvement. But every once in a while, World War III will break out over a family heirloom (often an item that has little-to-no financial value). So, the Executor should quickly figure out if any items fall into this category. If so, it should be secured right away before someone walks off with it

• Last Income Tax Returns. Connecticut and Federal income tax returns are still due April 15th even though the taxpayer has died. Hopefully the decedent had an accountant that prepared prior returns and he/she can help you with this task.

• Keep the Peace. A sudden financial windfall can bring out the worst in people and it’s not uncommon to have an Executor who is forced to deal with beneficiaries who are complaining about some aspect of the probate administration (how long the process is taking, whether the sale price for the house is fair, who gets the photo album, etc.). So, it’s up to the Executor to be a good diplomat and keep everyone happy, or at least happy enough to avoid litigation.

• Deal with the Probate Court. In the world of probate, it’s like an employer-employee relationship in which the Probate Judge is the employer and the Executor is the employee. This means that the Executor is accountable to the Judge and must ask for permission to do certain things, such as selling real estate (unless the will waives the need for court approval). It also means that the Executor can be “fired” by the Judge if she doesn’t fulfill her responsibilities. So, it’s important to dispel yourself of a common myth about probate; the Executor is not the boss. The Judge is.

Again, this is just a short list of many (not all) tasks for the Executor to address during the probate administration process, which usually takes several months. So, when you are preparing your last will and testament, pick an Executor with the right temperament and skill set. You should also make sure that person is aware of what the job entails and agrees to take on the role.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship. If you need legal advice, consult with a lawyer instead of a blog.

How to Ward Off a Will Contest

To start off, it’s worth mentioning that there is nothing you can do to guarantee against a will contest taking place, short of not having any estate at all when you pass away (spending your last dollar on your last day is, arguably, the best possible estate plan!). The reality is that anyone can petition the probate court to contest your last will & testament, regardless of the circumstances. So, the focus should be on minimizing the probability of a successful will contest upon your death.

Every will contest is different, but there does seem to be one common theme: the will contest was started because someone felt unjustly short-changed. So, if there is a “black sheep” in your family that you’ve disinherited, which means you can probably see the will contest coming from a mile away, here are some approaches to consider:

1. Make ‘em Think Twice. Stick a “forfeiture” or “in terrorem” clause in the will directing that the person you were going to disinherit is…well…no longer disinherited! Instead, he will receive a specific amount of money ($5K, $10K…it’s up to you) unless he decides to formally contest your will, in which case that money disappears, and he gets nothing. This forces him to decide between (a) spending tons of time and money on litigation which may or may not succeed in the end, or (b) take the money and run because although it’s not a fortune, it’s much better than nothing. You may not be thrilled with the concept of this person getting a payment from your estate, but that investment of a few thousand dollars could save the estate ten times that amount in legal fees spent on defending the will, not to mention a year or two in court.

2. Recruit Special Witnesses. If the two witnesses to your will signing are deposed or need to testify in front of a jury during the will contest, you will want them to have a detailed memory of the event. If the witnesses are a couple of paralegals from your attorney’s office, it’s possible that they have witnessed hundreds, perhaps thousands of will signings and will probably have zero recollection of your particular signing. Instead, if you bring a couple of neighbors who have never witnessed a will signing before, they will have a very detailed memory of your signing and can testify with confidence that you knew exactly what you were doing when you signed your will. This testimony alone may be enough to sink a will contest.

3. Get a Doctor’s Note. Whenever the decedent was elderly, there is a chance that the family troublemaker will try to argue in court that the decedent’s memory wasn’t very sharp, or perhaps her diminished mental capacity left her open to undue influence from others. Perhaps the best legal defense against this would be an evaluation from a doctor, dated fairly close to the date the will was signed, indicating that the decedent’s mental health was fine.

4. Clear the Room. “Undue influence” is probably the most common legal argument in support of a will contest; that the decedent was brow-beaten into signing the document against her will. This is an easy argument to make if all of the children, with the exception of the disinherited child, were in the room when the will was signed. So, you can make it a harder argument if the only other folks in the room are the two objective witnesses and the attorney.

5. Video. Videotaping the signing is another approach that could help fend off an argument of undue influence or lack of mental capacity. However, if you tend to get nervous in front of cameras then this could obviously backfire by showing the jury a jumpy decedent who perhaps was being threatened by someone off-camera.

The reality is that worst-case, you could use all of these approaches (plus some others that aren’t listed) and you may still end up with a will contest if the disgruntled party is motivated enough. But using techniques like these will make it harder for the will contest to be successful, and you could end up with a favorable settlement.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship. If you need legal advice, consult with a lawyer instead of a blog.

Cars and Probate in Connecticut

If you are the sole owner of your car, or you co-own the car with someone else and the title lists your name “and” the other person’s name, then the car will have to go through a probate administration process when you pass away. Then the car will probably become an unmitigated headache for your family, and especially whoever is in charge of winding up your financial affairs when you pass away (i.e. the “Executor”). Therefore, keeping your car out of probate upon your death should be one of your many estate planning goals. In fact, I can’t think of a benefit to purposefully having your car dragged through probate.

One reason this is a big headache is that when there is a car in probate, it is essentially owned by the estate until the Executor transfers it to whoever is the beneficiary under the will. That process could take several months. In the meantime, the advice is that no one should drive the car. This is because if someone does drive it around and gets into an accident, there is a half-decent chance that the estate will be sued. Then a probate process that is already a bit of a chore for the Executor will become several times worse when the estate is named as a defendant in a lawsuit. So, the car should ideally stay in the driveway, and no one should touch it until title is formally transferred to the beneficiary.

The second issue is that, regardless of whether the car is a $50,000 luxury vehicle or a $500 junker, the car cannot be sold, junked or even donated until the probate process is well off the ground. Again, this could take months. So, it must sit in the driveway and continue to be a nagging concern for the Executor, along with the dozen or so other concerns she has.

How do you avoid this? If you own the car with someone else and the word “or” appears between the two names then it will automatically be solely owned by the other owner when you pass away, thereby avoiding probate. Or you could fill out the beneficiary designation section on the back of your registration. Then title will automatically switch to the designated beneficiary upon your death. If you do not see beneficiary designation language on your registration, you could use a “Beneficiary 1” form (click here) which the beneficiary must submit to DMV within 60 days of your death. Finally, if you have a revocable living trust, you could re-title the car into the name of the trust, although this requires more paperwork than any of the above alternatives.

Today’s takeaway estate planning lesson: keep your car out of probate.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship. If you need legal advice, consult with a lawyer instead of a blog.

Keep Health Care Instructions on Your Phone

The estate planning document which addresses your health care wishes when you become incapacitated is referred to in Connecticut as your “Health Care Instructions”. This document is also known as a “Health Care Proxy”, “Advance Medical Directives” or “Health Care Power of Attorney” in other states. The document typically states who you have chosen as your representative when it comes to making medical decisions on your behalf. These decisions often include electing a certain type of surgery, medicine changes, therapy or discharge planning. It grants your agent access to your medical information, which is normally barred to third parties under the Health Insurance Portability and Accountability Act (HIPPA). In most cases, it also contains “Living Will” language, which lets your medical team know that you do not want to be kept alive in a genuinely hopeless situation.

In the world of your typical estate planning documents, this is the one potential “emergency” document, meaning that it may be necessary for family or friends to access this document immediately, without any warning. No other estate planning document really falls into this category. Therefore, making sure that the important people in your life have easy access to this document can be vitally important.

Many doctors and hospitals prefer to see original, hard copies of this particular document. Since medical providers can be very liability averse, they tend to get nervous when handed a photocopy of this particular legal document. Therefore, ideally, you should have several original copies of your health care instructions and they should be spread out amongst your health care agents, your doctor, your estate planning attorney and your own records.

I have some clients who keep an original health care document in the glove compartment of the car since their car tends to be wherever they are. However, there is one item that usually follows us everywhere these days, and that is (obviously) our phones. Therefore, it’s a good idea to keep a photo of each page of your health care document on your phone. Again, an original paper copy would be better, but in a pinch, a .jpg file is 100% better than nothing at all.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship. If you need legal advice, consult with a lawyer instead of a blog.

College-Bound Kids and Medical Decisions

As you may have noticed, college and the upcoming fall semester is a popular item in the news these days. Unfortunately, it’s mostly not for good reasons. As parents, it’s typical for us to worry about our children running into a medical emergency while away at school. Nowadays, that concern has been sharply heightened by COVID-19.

Parents should be aware that it’s a very big deal, in a legal sense, when your children reach age 18. The State of Connecticut now considers them to be full-blown adults, which means they manage their own health care. Gone are the days when the pediatrician turns to you for all of the big decisions. Also, in accordance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) you can no longer gain access to your child’s medical information unless she authorizes it. That was a particular headache for my wife and I when our eldest turned 18!

Therefore, it’s generally advisable for children who have turned 18 to sign a legal document called a “Health Care Instructions” document. This is also referred to as a “Health Care Proxy” or “Medical Power of Attorney”. This document legally authorizes you to make medical decisions for your child if she becomes incapacitated. Ideally, the document will also have language which gives you access to your child’s medical information so that you can avoid the HIPAA headache.

Your pediatrician’s office may or may not offer these documents, although your child’s signature should be witnessed and notarized (something the pediatrician’s office most likely won’t do!). As an attorney, when I have clients who are parents with college-age children I usually do their child’s health care document (and a durable power of attorney to cover financial affairs) for a minimal fee.

As the kids head off to college (at least most of them) there is plenty to worry about this fall. Having a health care document in place for your child will give you one less thing to worry about.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

Estate Tax: One Less Thing to Worry About

When I started practicing in 1997, the estate tax exemption was $600,000 and the top estate tax rate was a whopping 55%. This meant that there was a considerable estate tax to pay if you died with an estate larger than $600,000. That sounds like a lot, but remember that the value of your estate includes real estate and life insurance proceeds. So it was relatively common for estates to trigger the tax back then, which prompted some fancy footwork with my clients’ estate planning prior to death in order to mitigate the tax bite.

Well, times have changed.

The federal estate tax exemption is now a jaw-dropping $11.4 million and the top tax rate is down to 40%! And even if you are in the tiny percentage of the U.S. population that actually exceeds that figure, they only tax the dollars above that $11.4 million threshold.

Additionally, if you are a married couple you can take advantage of an estate tax concept called “portability”, which allows your surviving spouse to use any unused portion of your exemption. For example, if a husband dies with a $3 million estate, then he did not use $8.4 million of his exemption. That unused exemption can be shifted over to his spouse, and now she can pass away with an estate as large as $19.8 million with no estate tax liability. Put another way, a married couple essentially enjoys a $22.8 million estate tax exemption!

Now, of course, Connecticut has its own state estate tax. The Connecticut exemption isn’t quite as generous as the federal exemption, but it still ain’t bad. The exemption is $3.6 million this year, $5.1 million in 2020, $7.1 million in 2021, $9.1 million in 2022, and then it catches up with the federal exemption in 2023.

All of this means that virtually none of my clients are doing estate tax planning anymore. Instead, they’re focused mostly on minimizing probate exposure and generally making sure things go smoothly for their loved ones if they pass away.

There are plenty of things to fret over these days, but having your estate decimated by a huge estate tax is, thankfully, no longer one of them.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

Estate Planning: A Tale of Two Celebrities

Prince, the iconic American musical artist, died in 2016 and inexplicably left no last will & testament. This is despite having an enormous estate which is reportedly in the neighborhood of $300 million. Suffice it to say an epic legal/probate mess quickly ensued and Prince’s estate will most likely not be wrapped up anytime soon. Click here for an online article from Money for all of the gory probate details.

Another celebrity from my boyhood days in the 1980’s, Luke Perry, died unexpectedly from a stroke on March 4th. Despite his relatively young age of 52, it looks like he actually had a solid estate plan in place. Not only will this make it more likely that his estate (estimated at around $10 million) will be distributed and wound up in an orderly manner, but his advance medical directives presumably made the difficult situation at the hospital go much smoother than it may have otherwise. Click here for an online article from Forbes for the details.

Well, reading about such famous people from my childhood passing away makes me feel old. On the upside, this comparison of how two well-known celebrities planned ahead (or didn’t) provides us with a good illustration of why estate planning is so important, whether you’re famous or not.

3 Reasons to Get a Will if You Have Minor Children

If you have young kids, it’s possible that you don’t have a huge estate yet, so there may be no sense of urgency to sign a last will & testament. Why do any estate planning if there’s no estate to plan for, right?

Well, there are at least three big reasons to get a last will & testament in place.

The first reason, which most parents are at least vaguely aware of, is to appoint guardians. It’s not fun to think about, but if you suddenly disappear and you have a minor child then you will need someone to take over to make personal, medical and educational decisions for your child. Your appointment of guardian is made in your will. If there is no will, then it’s up the court to appoint someone as guardian. In some families, the choice is relatively obvious. But in many families, it’s not. And in some families it’s clear that World War III is going to break out over who will become guardian if there are no legal instructions in place. Don’t leave this potential landmine behind for your child and family. They will be going through enough turmoil as it is.

Secondly, you will probably want someone to manage your child’s inheritance for her if she is over the age of majority but still relatively young when you pass away. For most clients, the age range for this is 18 to 25. In other words, a child over the age of 18 (in Connecticut) is legally competent to manage her own inheritance, but she may not be actually competent to do so if she is under 25. Most folks under 25 don’t have a lot of investment experience and could potentially be easy prey to scam artists. If you’re shrugging this off because you don’t think your estate is very big then think again, particularly if you have life insurance. It seems like nearly all of my clients end up underestimating the size of their estate by a good amount.

Third, and perhaps most importantly, you’ll simply feel like a responsible and diligent parent. I’m certainly not trying to lay a guilt-trip on anyone who hasn’t attended to this yet. As a father of three young boys myself, I know first-hand how crazy the schedule can be with young kids. But yearning for some peace-of-mind seems to be what drives most of my clients with minor kids to come in and get their wills done.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

"Dignity of Life" Seminar on April 3rd

Attorney Keenan will participate in a panel discussion at St. Paul’s Church in Glastonbury, CT on planning for the end of life. Attorney Keenan will discuss essential estate planning steps. The discussion is presented by the Catholic Cemeteries Association of the Archdiocese of Hartford, Inc. Call 203-507-6952 for details and to register.

There will be two presentations at 2pm and 6pm. It should last about one hour. Light refreshments will be served.

"Digital Assets" and Estate Planning

For most of us, both financial and social online accounts have played a rather significant role in our day-to-day lives for many years. However, it’s rare that clients consider them when designing their estate plan. Leaving some detailed information and directions for your Executor regarding your “digital assets” should be an agenda item for your estate planning.

Consider maintaining a list (either paper or a computer spreadsheet) which includes all of your usernames and passwords for your online accounts. This would include email (including any encryption information), bank and brokerage accounts, retirement accounts, photograph/video/data storage sites (e.g. Google Drive, Microsoft OneDrive), social networking sites (e.g. Facebook, Instagram, Twitter), business-oriented social media sites (LikedIn), blogs, your own personal website or business website, streaming services (e.g. Netflix, Amazon Prime, ESPN+), online data backup services (Carbonite), online document & spreadsheet processing accounts (Google Docs), tax preparation accounts (Turbo Tax), credit card accounts and accounts for paying your household utilities.

Some of these accounts will help your Executor figure out where your assets are and what outstanding bills need to be paid. There may also be some automatic payments scheduled from online bank accounts that will need to be shut off. You could also leave instructions about which social media sites to shut down and whether you want one or more of these sites to share information with your online social community about your demise. Some of these sites (a personal blog or an online photography account, in particular) may contain information that you want your Executor to download and pass on to children or grandchildren for sentimental reasons.

You should also put together a list of all your devices, such as your desktop computers, laptop computers, tablets and smart phones. Those devices may hold additional data on their hard drives (information that you do not keep online or in “the cloud”) that could further help your Executor wind up your financial affairs.

Keeping these lists updated is important since some of this information, particularly passwords, change relatively frequently. Perhaps you could make updating these lists part of your annual routine, maybe at the same time that you do your tax reporting each year.

I can tell you from 21+ years of probate experience that an Executor’s job is not easy. That’s probably the understatement of the day. But easy access to comprehensive information about your digital assets will make the probate process, as well as addressing all of the non-probate details, much easier.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

A New "Asset Test" for the Medicare Savings Program in Connecticut?

Governor Ned Lamont is taking aim at Connecticut’s sizable budget deficit. Unfortunately, he has proposed an asset test for the Medicare Savings Program (MSP) which currently only has an income test.

The proposal calls for an asset limit of $7,560 for singles and $11,340 for couples. The State would count assets like cash you have in a checking, savings or investment account, as well as stocks and bonds. I haven’t heard if assets that are considered non-countable under the Medicaid program (e.g. term life insurance, irrevocable funeral contracts) would also be non-countable for MSP. The asset test will be effective July 1, 2020.

This is not great news for some of my elderly and disabled clients. Stay tuned.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

Guest Author: Jane Duncan

June Duncan is the author of the upcoming book, The Complete Guide to Caregiving: A Daily Companion for New Senior Caregivers. I am anxiously awaiting the book's release in the Winter of 2018. June has generously allowed me to share an article she recently wrote which includes some of the information from her upcoming book, which covers a wide variety of caregiving-related topics.

Enjoy!

Above photo By: Pixabay

Does Your Loved One Need Live-In Help?

 As the loved one in your life ages, it’s inevitable their physical and mental health needs will change. It’s normal to see diminished hearing/eyesight, lessened mobility/balance, and a cognitive decline. At first, it was easy for you to be there to offer assistance, like driving them to the grocery store once a week or stopping in periodically to deliver med refills or sort through the mail. However, as their health changes, your caregiving responsibilities increase. You can’t be there for them 24/7, so it might be necessary to consider the possibility of additional help, possibly live-in help. Consider the following signs that it might be time to consider taking this next step:

Broaching the Subject

Before you take the next step, it’s important to sit down and have a serious conversation with your loved one about what you’re considering. Once the word “help” is thrown into the mix, there will be questions, so come prepared with research. There are different types of home health care services, so becoming knowledgeable of the various options will benefit you too. Perhaps your loved one needs help with transportation, basic household tasks, or desires a companion to combat loneliness. Depending on the stage your loved one is in, the degree of help may intensify to the point where live-in help is necessary to provide more careful monitoring and ensure they’re remaining safe and healthy.

When you first bring up the possibility of hiring help, ease into it slowly, but back off if you’re met with resistance. It may take several conversations before you’re able to explicitly suggest live-in help, so be patient. Follow their cues, letting them guide the conversation. You might find that they are open to help, while others are a little wary or downright turned off by the idea. Consider having someone else talk about it with them, like a doctor, close friend or even another family member.

Signs It’s Time to Bring in Help

Increased Difficulty

One of the biggest signs that it’s time to call in reinforcements is when your loved one starts having difficulty with personal care, mobility and medications. Hygiene and cleanliness are essential, but proper bathing and grooming can be difficult due to decreased mobility or even forgetfulness. Mobility and balance also affect the ability to complete daily tasks like cooking, cleaning, using the bathroom or getting in and out of bed/chairs/cars. As for medication, even the slightest mix-up can be fatal due to an interaction or unintentional overdose, and a home health aide can help keep your loved one on track by administering meds.

Declining Health

Look for signs of diminished health such as sudden weight loss/gain, forgetfulness, or bruises, which could be a sign of a fall. It’s possible certain tasks have become to difficult. Your loved one may struggle with preparing meals, driving, washing clothes, or taking out the trash. Even the easiest tasks such as tying shoes, getting the mail, or opening kitchen cabinets can become troublesome due to frailty and loss of energy, all of which can lead to an increased risk of injury due to falls. Once physical signs start to show, this is a big indicator that now might be time to bring in someone to offer around-the-clock assistance.

Loss of Interest

Your loved one used to cringe at the thought of ever missing their weekly yoga or art class, and when you stopped to check in you could almost always be sure that they were knitting yet another blanket or outside working on another carpentry project. However, you may have recently noticed that they have lost interest in hobbies and activities they once enjoyed, pointing to signs of depression, loneliness, or an underlying medical condition. Interests change, but a sudden abandonment of an activity that once brought so much joy is a red flag.

Realizing that your loved one needs extra help beyond what you can provide might seem counterintuitive to your caregiving role, but bringing in reinforcements simply shows how dedicated you are to the health and well-being of your loved one. Caregiving is a group effort, and extra help is not only necessary, but encouraged.

Check Out "The Sharing Tree" Glastonbury Newsletter for Seniors

I just ran across a fantastic monthly newsletter published by the Glastonbury Senior Center called "The Sharing Tree". It contains information on special events, support groups, programs, trips and classes. It also provides a calendar, Social Services news and brief medical articles.

This newsletter is a great little resource for local seniors and their families. Check it out here when you get a chance. 

Estate Planning for Problematic Children

It's unfortunate, but clients who meet with me to do their estate planning will sometimes mention that one or more of their children is "problematic" for one reason or another.  

And although the clients want to leave something to that child, there's a concern that their hard-earned money will be "wasted" once the child receives his inheritance.

The best approach in such a situation is usually to have that child's inheritance go into what is commonly called a "spendthrift" trust.  I prefer the term "protection" trust just because it sounds kinder.  

In any case, using such a trust as a component of your estate planning is generally a wise approach when a child (or any beneficiary who is not a child) is in one or more of the following cicumstances:

• The child is irresponsible with money management, does not have a history of saving and investing, and there is a concern that your hard-earned estate will be wasted;
• The child has a history of creditor problems, actually has current creditor problems, or you are reasonably certain that creditor issues will arise in the future based on the child's behavior;
• The child is in an unstable marriage where a divorce is more than likely, in which case the trust can prevent the estate from becoming part of a divorce settlement process;
• The child is addicted to drugs, alcohol or gambling;
• The child has a history of being influenced by an overbearing spouse in regards to money management;
• The child joins an unorthodox religious group (a.k.a. "cult") or some similar organization and you do not want some/all of your estate to ultimately be donated to such a group;
• The child would be prone to "financial predators" and scam artists.

Please note that this is not always the best approach, but those of you with unstable children should discuss this issue with your estate planning attorney.  Otherwise, your child's inheritance may tragically disappear...and perhaps make your child's problem worse.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

Connecticut Probate Cannot be Avoided

For those of you who have not been through the probate process in Connecticut yet, I'm writing to give you a head's-up about the fact that there is no way to completely avoid probate in this state.

In other words, even if you do everything humanly possible to avoid probate, which is to say you use a revocable living trust (and actually fund it, by the way!), you have updated beneficiaries on your life insurance, retirement accounts, annuities, etc., you use joint ownership effectively, and you use TOD/POD features if available, someone will still need to file documents with the probate court upon your passing.

The most important document to file, regardless of how many assets (if any) have to go through probate, is the estate tax return.  The return needs to list everything in your name when you died, including probate and non-probate assets.  The court will use this return to determine if there is any estate tax liability to attend to. It will also be used to calculate the probate court's fee. And yes, there will be a probate court fee even if none of your assets are actually processed through probate.

Now, having said that, please keep in mind that there is an enormous difference between filing a few documents with the court and going through a full-blown probate process (maybe 10-12 months of administration, even if everything goes smoothly). So it is still worthwhile to consider some probate-avoidance maneuvers you can make before you pass away.   

So, to sum up, you can only minimize Connecticut probate upon death.  You cannot avoid it entirely.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.